Answer (D) is correct.
The balance sheet presents three major financial accounting elements:
assets (items of value), liabilities (debts), and equity (net worth).
According to the FASB’s Conceptual Framework, assets are probable
future economic benefits resulting from past transactions or events.
Liabilities are probable future sacrifices of economic benefits arising
from present obligations as a result of past transactions or events. Equity
is the residual interest in the assets after deduction of liabilities.